The New Jersey State Association of Pipe Trades is opposing a measure to tax high quantity processors of stock trades, a move that has caused the New York Stock Exchange to threaten a move out of New Jersey.
Union president Mike Maloney said the legislation “will cost many of our members their livelihoods.”
“While we understand all too well the current financial position the state budget is in due to the pandemic, we cannot support taxes that will cost us jobs,” Maloney said. “The women and men of the New Jersey Pipetrades are not immune to these excruciating economic times we currently face, nor can we stand idly when policies are proposed that will further negatively impact our Union.”
Gov. Phil Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin have all said they would consider a plan to institute a quarter-of-a-cent tax on certain financial transactions.
The Assembly Financial Institutions and Insurance Committee is scheduled to consider the proposal, sponsored by committee chairman John McKeon, on Monday.
The International Brotherhood of Electrical Workers announced its opposition to a bill earlier this week – a move that likely takes three Democratic Assemblymen off the table: Joseph Egan (D-New Brunswick), Wayne DeAngelo (D-Hamilton) and Eric Houghtaling (D-Neptune). All three are IBEW officials.
The growing approval from legislative leaders follows a concerted effort, made by the exchanges and other business organizations, to head off the tax.
Since early October, the Exchanges, the New Jersey and U.S. Chambers of Commerce, the New Jersey Business and Industry Association and host of other financial groups have sought to lobby Sweeney, Coughlin and the state’s congressional delegation against the microcent tax with letters warning of a coming industry flight.
The NYSE has explored a move to Chicago, while NASDAQ is in talks to relocate to Texas. Still, there’s been little clarity about the number of jobs such moves would actually cost New Jersey.
Further, it’s not clear how the increased distance between New York markets and datacenters in the Midwest and Southern United States would affect time-sensitive high-frequency trades the microcent tax targets.
Financial transaction taxes imposed in other countries have led to industry flight and declines in trading volume, but those were most often imposed on a national level and frequently imposed a tax based on trade value, not on transaction frequency.
The plan was first proposed by the late David Applefield during his campaign for the Democratic nomination for Congress earlier this year.